Hi Mann,
Congratulations on starting the investing journey so early in life. I believe this is one of the best decision you have made till date.
Now I have some comments on SKP. The company is going for huge capex, which is more towards expanding the balls segment. After the capex completion, the capacity will be increased from present 480 tonnes/Yr to 2500 Tonnes/Yr. which is more than 5X capacity expansion. Now the total capacity utilization for the Balls Segment is only ~45% at present.
Now for the Roller segment, the current Capacity Utilization at 92% and after Capex, it will be 2400 Tones/Yr, from current capacity of 1300/Yr which is ~2X
Revenue share from the Roller segment is also much more than the Balls segment and so is the Profitability with highest margin.
I dont understand why the management decided to expand the Balls segment much more than the Roller segment. It should have been the other way around if they had to go for this huge expansion now, considering the current revenue and capacity utilization rate for both the segments. especially when there is no future orders confirmation.
Do you have any information in this regards? Or if you asked this question to the management?
Thank you.
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